 Period Beginning Loan Balance Payment Interest Principal Ending Loan Balance Month or period Amount of debt owed at the start of the month of period Amount due each month (often a fixed amount over the term of the loan) Amount of interest included in the payment (loan balance * 1/12 of interest) Amount of principal
What Is an Amortization Schedule? Amortizing loans feature level payment amounts over the life of the loan, but with varying proportions of interest and principal making up each payment. A traditional mortgage is a prime example of such a loan. A loan amortization schedule represents the complete table of periodic loan payments, showing the amount
What Is the Amortization of Intangibles? Amortization of intangibles, also simply known as amortization, is the process of expensing the cost of an intangible asset over the projected life of the asset for tax or accounting purposes. Intangible assets, such as patents and trademarks, are amortized into an expense account called amortization. Tangible assets are
What Is an Amortized Loan? An amortized loan is a type of loan with scheduled, periodic payments that are applied to both the loan’s principal amount and the interest accrued. An amortized loan payment first pays off the relevant interest expense for the period, after which the remainder of the payment is put toward reducing
What Is an Amortized Bond? An amortized bond is one in which the principal (face value) on the debt is paid down regularly, along with its interest expense over the life of the bond. A fixed-rate residential mortgage is one common example because the monthly payment remains constant over its life of, say, 30 years.
What Is an Amortizing Swap? An amortizing swap is an interest rate swap where the notional principal amount is reduced at the underlying fixed and floating rates. Key Takeaways An amortizing swap is an interest rate swap where the notional principal amount is reduced at the underlying fixed and floating rates.An amortizing swap is a
What Is Net Amount at Risk? The net amount at risk is the monetary difference between the amount of money paid out for a life insurance policy and the accrued cash value paid for it by the insured individual. The net amount at risk number is critical to insurance companies as it represents how much
What Is Amount Financed? Amount financed is the actual amount of approved credit extended to a borrower in a loan from a lender, and if accepted, requires repayment by the borrower. Key Takeaways The amount financed is the amount of credit made available to a borrower in a loan that requires repayment. The amount financed
What Is Amount Realized? Amount realized is the total amount received from a sale transaction. It factors in cash, the fair market value (FMV) of any assets, existing liabilities, as well as sales expenses. Key Takeaways Amount realized is the total amount received from a sale transaction.It encompasses all forms of compensation, including cash, the
What Is an Alternative Mortgage Instrument (AMI)? An alternative mortgage instrument (AMI) is any residential mortgage loan that deviates from standard mortgage practices. For instance, it may be a mortgage that is not fixed-rate, fully amortizing, has monthly or periodic payments, or a standard term of repayment. Sometimes, an AMI is a loan with real
